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by Group III Base Oils
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SK Energy Introduction
Backgrounds of Group III Base Oil
Trends of High Quality Lubricants
Summary
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Energy
&
Chemicals
Telecom
Trading
&
Services
HoldingCompany
• SK Holdings
• SK Energy• SK E&S• SK Chemicals • SKC• SK Incheon Oil • Dopco• K-Power
• SK Telecom• SK C&C• SK Telink• SK Telesys• Helio
• SK Networks• SK Engineering & Construction • SK Shipping • Sheraton Walkerhill• SK Securities
• Sales : 73.7 billion USD
• Total Assets : 63.3 billion USD
• Employees : About 30,000
Sales Ratio
* Includes the sales from SK Networks
(Data in 2006)
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History
Established in 1962 as Korea’s first domestic oil refining company.
Acquired by SK Group in 1982, and called YUKONG.
Name changed to SK Corporation in 1997.
Split into SK Holdings and SK Energy in July 1, 2007
Business Areas
Refining, Petrochemicals, Exploration & Production, Coal, Lubricants, etc.
Leading Energy & Petrochemical player in Korea
Largest refiner in Korea’s oil industry, holding over 1/3 of the market
share, and leading Petrochemical, Lubricant player in Korea.
Globalization
SK Energy is in a transitive phase, increasingly penetrating into
overseas markets with a view to becoming a major player in the Asia-
Pacific region.
SK Corporation(Former SK Energy) has been ranked as 98th in Fortune
Global 500 company list, 2007
1997- 2007
YUKONG
1982-1997
Korea Oil Company
1962-1982
Present
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Ethylene: 830,000 Ton/Yr
Propylene: 540,000 Ton/Yr
BTX: 3,600,000 Ton/Yr
Engaged in 24 blocks
in 14 countries
Oil equivalent reserves
: 510 million Bbl
Production(E) : 25,000 B/D
Lubricant: 4,000 B/D
Base Oil: 20,000 B/D
Grease: 6,000 Ton/Yr
Domestic market share: 34%
CDU capacity: 1,115 m b/d
Gas station: 4,185
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World Top 10 Base Oil Suppliers
• Capacity : 20,000 bbs/day
50% world M/S in Group III base oil market
Brand name is ‘YUBASE’
Has worldwide supply network for global customers
Found JV with PT. PERTAMINA for new 350,000MT/year capacity refinery in Dumai
Production Capacity
• Lubricants : 4,000 bbls/day
Grease : 6,000 tons/year
No.1 player in Korea since 1968 in the competition of worldwide majors
Premium brand name is ‘ZIC’
Has a 30% M/S in engine oil market (Total 16% market share in Korea)
Continuing to expand markets abroad
Launched co-branding product named ‘ZIPEX’ with PT. PERTAMINA in Pakistan
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API Category Viscosity IndexSaturates
(%)Sulfur(%)
Group I 80-120 < 90 >0.03
Group II 80-120 ≥ 90 ≤ 0.03
Group III 120 + ≥ 90 ≤ 0.03
Group IV PAO
Group V All others
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ItemASTM
MethodYUBASE 4 YUBASE 6 YUBASE 8
KV @ 40°C, cSt D445 19.6 36.9 47.0
KV @ 100°C, cSt D445 4.25 6.46 7.60
Viscosity Index D2270 123 130 128
NOACK Volatility, wt% D5800 14.7 7.1 5.0
Pour Point, °C D92 -15 -12 -12
Flash Point, °C D97 230 240 260
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2000
Group III
Group II
Group I
2005
4%2%
2010
7~8%
2015
10~%
25,000
20,000
15,000
10,000
5,000
30,000
[KMT]
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Source: Lubes n Grease, 2006
[BPD]
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Chemical Type Structure VI Pour Oxidation Toxicity
Very High~175
High~150
Good~130
Good~130
Poor~60
Poor~60
Very Poor<0
Solid
@50°C
Good
Good
Good
Good
Good
Good
Excellent
Excellent
Excellent
Good
Medium
Medium
Very Poor
Low
Low
Low
Low
Low
Medium
Very High
n-Paraffin (Wax)
iso-Paraffins with Branched chains
iso-Paraffins with highly branched chains (PAO's)
cyclo-Paraffin-single ring with
long chains
Naphthenes, polycondensed
Monoaromatics, long chains
Polyaromatics
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YU
BASE High Isoparaffin Content
Some Naphthenic Compound
Small or Zero Aromatic
Gro
up I
Low Isoparaffin Content
Some Naphthenic Compound
High Aromatic
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Low Temp. Performance: CCS Viscosity[cp] Oxidation Performance: RBOT[min] 1)
Oxidation Performance: PCT[mg] 2) Oil Consumption: Noack [wt%] 3)
1) ASTM D2270, + 0.3wt% Antioxidant2) 10.3% A3/B3 DI Additive + 10% VII3) 250'C, 1hr
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Features
• Low Aromatics
• Low volatility
• Very High VI
• Low Aromatics
• High Saturates
• Good Additive Response
• Low Volatility
• Narrow Boiling Ranges
• Low Wax
• Very High VI
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ReasonsFeatures
• Environmentally Friendliness
• Good Friction Behavior
• Wear Reduction
• Higher Thermal/OxidativeStability (Longer life)
• Low Oil Consumption
• Higher Flash Points
• Better Low Temp. Performance
• Low Aromatics
• Low volatility
• Very High VI
• Low Aromatics
• High Saturates
• Good Additive Response
• Low Volatility
• Narrow Boiling Ranges
• Low Wax
• Very High VI
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Reduce Fuel Costs
Reduce Lubricant Costs
Reduce Emissions
Reduce Maintenance Costs
Reduce Personal and Social Costs
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2004
ILSAC GF-4
2005 2006 2007 2008 2009
ILSAC GF-5
API CI-4+ API CJ-4
ACEA C3, C2MB 229.31
ACEA E6MB 228.51
ACEA ??MB 228.??
ACEA ??MB 229.??
GM Dexron IIIH GM Dexron VI
US
Japan
Europe
Gasoline
Diesel
ATF
Euro IV Euro V
Gasoline
Diesel
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Legislation Consumers
OEMsLubricant
Manufacturers
Global Economy
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Legislation
Source: Lubrizol
OEMs0
0.01
0.02
0.03
0.04
0.05
0.06
0 0.1 0.2 0.3 0.4 0.5 0.6
Euro 3
Euro 4
Euro 5
US Tier 2 bin 5
NOx (g/km)
PM(g/km) Emissions Standards
- Passenger Car Diesel -
• Set Emission Target
• Reduce PM/NOx/SAPS
• Increase Fuel Economy
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Legislation
Source: Lubrizol
OEMs
ILSAC : Phosphorus Content Limit
GF-1:
0.12 max
1990 1995 2000 2005
P content
in oil
(wt%)
0.12
0.10
0.08
0.06
0.04
GF-2:
0.10 max
GF-3:
0.10 max
GF-4
0.08 max
• Set Emission Target
• Reduce PM/NOx/SAPS
• Increase Fuel Economy
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Legislation
Source: Lubrizol
OEMs
ILSAC : Fuel Efficiency Requirement
Seq.VI F/E
improvement
%(vs.20W30)
SG
1990 1995 2000 2005
5
4
3
2
1
1
0
2
3
Seq.VIB F/E
improvement
%(vs.5W30)
GF-1
GF-2
GF-3
5W20 & 0W20
5W30 & 0W30
10W30
GF-4
• Set Emission Target
• Reduce PM/NOx/SAPS
• Increase Fuel Economy
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• Newly Designed Engines
• Severer Operating Condition
• After-treatment Devices
Legislation
OEMs Lubricant Manufacturers
• Set Emission Target
• Reduce PM/NOx/SAPS
• Increase Fuel Economy
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High
Low
Low High
Cranking, Startability Wear
Pumpability Oil Consumption
LTHS HTHS
LTLS HTLS
CCS, KV@40℃ HTHS, TBS
MRV, Brookfield NOACK, KV@100℃
FuelEconomy
MajorPerformance
Test Item
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SAE 40
SAE 10W
Max. Viscosity
(Low Temp)
Min. Viscosity
(High Temp)
Low High
x
Lubricating Area
Good Startability
Better Bearing Lubrication
Reduced Oil Consumption
Better Fuel Economy
General Benefits of Multi-grade Lubricants
SAE 10W/40
x
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High
Low
Low High
High Viscosity Index
Low Viscosity Index
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High
Low
Low High
Solutions to IncreaseViscosity Index
Consideration Points
Viscosity Modifier
High Viscosity Index Base Oils
Formulation Economics
Toxicity
Impacts on Other Performance
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ILSAC : Fuel Efficiency Requirement
Seq.VI F/E
improvement
%(vs.20W30)
SG
1990 1995 2000 2005
5
4
3
2
1
1
0
2
3
Seq.VIB F/E
improvement
%(vs.5W30)
GF-1
GF-2
GF-3
5W20 & 0W20
5W30 & 0W30
10W30
GF-4
Fleet Car Trial - Average Fuel Savings
High Sheer Viscosity
5W/30 10W/40
15W/4015W/50
20W/50R
ela
tive
Fu
el
Sa
vin
g
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• Longer Drain Intervals
• Better Fuel Economy
• Price Efficiency
Consumer
Lubricant Manufacturers
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Cost Efficiency
‘Synthetic’ Claims
Product Differentiation
Operational Conveniences Lubricant Manufacturers
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• Very Low Sulfur (≤ 0.03 %)
• Very High Viscosity Index (120 + )
• Excellent Low Temperature Performance
• Low Volatility & High Flash Point
• Excellent Thermal and Oxidative stability
Can be marketed as ‘Synthetic’
Features
Group III Base Oils
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1st
2nd
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S-Oil PetronasNeste
+5.5KBD
+7.5KBD
GS Caltex
+3KBD
+7.7KBD
GTL?
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Demand (Case 1 & 2)
2003 2006 2009 2012
75,000
50,000
25,000
[BPD]
2015
Supply
Supply by SK energy
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Viscosity Index NOACK
80
90
100
110
120
130
140
Gr-Ⅰ100N
Gr-Ⅱ100N
Gr-Ⅲ4cSt
New YUBASE4
PAO4
10
12
14
16
18
20
Gr-Ⅰ100N
Gr-Ⅱ100N
Gr-Ⅲ4cSt
New YUBASE4
PAO4
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Technical Needs
Drive Towards Lighter Viscosity Multigrades
With Tightened Approval Specifications in Lube Industry
Limitation of using Harmful Additives to meet Demanding Performance
Marketing Needs
Drive Cost effective, ‘Synthetic’ labeling High Quality Lubricants
Is Encouraged by availability of large volumes of Group III/GTL production
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Reduce Personal and Social Costs
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Branch Office Storage Tank Agent/Distributer
Houston Tokyo
Jakarta
London
Tianjin
SK Corp.
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